A nonprofit publication of the Kentucky Center for Public Service Journalism

Gas prices continue to fall across the country, but lower prices could spark increased demand

The national average for a gallon of gas fell to $4.21, down 14 cents since last week. But the lower prices are spurring a slight uptick in gas demand that could end the trend of daily drops in pump prices.

“With gas below $4 a gallon at nearly half of the gas stations across the country, we’ve seen some increases in demand,” said Lori Weaver Hawkins, public affairs manager, AAA Blue Grass. “If that becomes a continuing trend, greater demand could slow the fall of prices at the pump.” Weaver Hawkins adds that other factors, including hurricane season and geopolitical events that impact oil prices, also go into determining where gas prices are headed.

According to new data from the Energy Information Administration (EIA), gas demand increased from 8.52 million barrels per day to 9.25 million barrels per day last week. The estimated rate is 80,000 barrels per day lower than last year, but it could slow pump price decreases if the trend holds. Additionally, total domestic gasoline stocks decreased by 3.3 million barrels to 225.1 million barrels, signaling that higher demand resulted in reduced inventory last week.

(NKyTribune File)

Monday’s national average of $4.21 is 63 cents less than a month ago and $1.04 more than a year ago.

Kentucky’s gas price average is now at $3.83, which is 17 cents lower on the week and among the top 10 least expensive markets in the nation in terms of gas prices. Today’s price is 72 cents lower on the month, but still 92 cents higher than a year ago.

Gas prices in Lexington are averaging $3.99, which is 17 cents lower on the week and 64 cents lower on the month. The average price in Lexington a year ago was $2.88.

The average gas price in Ashland is now $4.26. That’s 13 cents lower than a week ago and 51 cents lower than a month ago. The average price for Ashland a year ago was $2.97.

There are now 24 counties in Kentucky averaging below $3.63 a gallon. The state’s lowest county-level average can again be found in Edmonson County at $3.338, down 20 cents on the week, followed by Simpson County at $3.39, following a 21-cent drop on the week. The county with the highest gas price average is Elliott County at $4.29, follow by Boyd County at $4.28.

For those planning to travel around the region, the average price for a gallon of unleaded today in Ohio is $3.93, West Virginia $4.31, Virginia $3.99, Tennessee $3.78, Indiana $4.16, Illinois $4.63 and Missouri $3.84.

The western region of the U.S. continues to have considerably higher gas prices, while much of the south is enjoying some of the country’s lowest gas prices. Only six states in the nation still average at or above $5 a gallon mark, down one from last week.

The highest spot in the nation remains California, now at $5.60 after a 13-cent drop on the week, followed by Hawaii at $5.44, which fell 8 cents on the week. Oregon and Nevada are the highest spots within the contiguous U.S. after California, both now $5.07.

Texas has the lowest gas price average in the nation today, currently at $3.71, followed by South Carolina at $3.73.

The nation’s top 10 largest weekly decreases: Colorado (−22 cents), Kansas (−22 cents), Ohio (−22 cents), Nebraska (−21 cents), Indiana (−21 cents), Michigan (−20 cents), Iowa (−20 cents), Illinois (−19 cents), Oklahoma (−19 cents) and Arizona (−19 cents).

The nation’s top 10 least expensive markets: Texas ($3.71), South Carolina ($3.73), Georgia ($3.76), Oklahoma ($3.77), Arkansas ($3.77), Mississippi ($3.77), Tennessee ($3.78), Alabama ($3.78), Louisiana ($3.82) and Kentucky ($3.83).

At the close of Friday’s formal trading session, West Texas Intermediate increased by $2.20 to settle at $98.62. Crude prices increased last week as market concerns about weakening demand this summer eased after the EIA reported that total domestic crude stocks decreased by 4.5 million bbl to 422.1 million bbl last week, 13.5 million bbl lower than the storage level at the end of July 2021. Additionally, crude prices rose after the market adjusted its expectations for supply since the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group also known as OPEC+, will most likely announce its output will remain unchanged for September at its videoconference meeting on August 3. For this week, amid an unlikely supply increase from OPEC+, persistent supply concerns could boost the cost of crude oil.

AAA Blue Grass

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